Louisiana Independent Contractors: What you need to know

Whether a worker is an “employee” or an “independent contractor” is critical when it comes to such important issues as pension eligibility, workers' compensation coverage, wage and hour law, and many other matters. In some situations federal law will govern, but the question is most often resolved by looking to state law, particularly in areas such as unemployment tax liability, workers' compensation, and state wage and hour requirements.

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In Louisiana and elsewhere, the most important or significant consideration in determining employee or contractor status is the fundamental question of control. Conversely, the lack of the employer's right to control the mode of doing the work is the primary consideration in bona fide independent contractor status. There are no hard-and-fast criteria set out by statute or regulation. Instead, the courts have fashioned a rough set of rules that focus on the following “common-law” factors:

• Is there a contract for the performance of specified work?

• Does the worker operate a distinct business?

• Does the worker furnish materials or hire helpers?

• Is the job a special assignment (rather than an integral part of the employer's business)?

• Is the worker paid by the job (rather than by the hour)?

• Does the work require special skill?

• Is the work of a kind that is normally performed without direction from the employer?

• Is the employment temporary?

• Does the worker have the opportunity to make a profit or sustain a loss?

If enough of these questions are answered “yes,” the worker is likely to be considered an independent contractor. Although there is no precise formula for measuring whether a particular arrangement satisfies enough of these ...